Lerato Sebata joined the 2026 SME Funding Summit as one of the speakers providing entrepreneurs with essential information on how to grow their business. Sebata specialises in the procurement sector and gave a powerful presentation on using procurement opportunities as a means to unlock funding.
“Procurement is an enabler in the business that procures on behalf of each and every organisation, and then the statistics tell us that public sector procurement spend is over a trillion now, and this is excluding the private sector. So if you have not tapped into the market, you are missing out,” said Sebata.
Sebata’s angle on procurement as a revenue stream taps into the understanding that, in business, there are different ways of getting revenue, and procurement is one of them.
Business Readiness Before Procurement
For Sebata, procurement readiness starts before a business responds to a tender.
“What I want to highlight are the critical things which you need as a business before you start, or even if you started, to ensure that you maintain the status quo and grow into further businesses as well.”
The first area is compliance. Businesses need to ensure that their required documentation, including B-BBEE and CSD information, is in order and kept up to date.
She pointed out that businesses can lose opportunities because of simple administrative oversights, including attaching an expired document when a current one is available.
“And I think we underestimated the administration that goes into it.”
Financial Readiness Matters
Financial readiness was one of the key areas of the presentation. Preparing bookkeeping and financial statements allows businesses to be ready for the financial due diligence that can form part of the procurement process.
Sebata encouraged business owners to conduct financial health checks and understand their profitability and liquidity. Those are the readiness factors that you need to consider because those are the ratios procurement looks at.
She also highlighted the importance of understanding how quickly a business can turn its inventory and equipment into cash. Financial readiness is particularly important for businesses that need to maintain operations while waiting for payment. Labour-intensive businesses, for example, may need sufficient working capital to cover salaries for several months.
For business owners, the homework from Lerato Sebata was to ask their accountants to assess the business’s financial position.
“Are you liquid? Are you not liquid? And are you profitable or not?”
This financial preparation can also support funding applications once a business has secured a purchase order. Now that you have a PO, it makes it easier to see what your revenue projections are. Businesses can also consult National Treasury’s procurement guidelines when preparing for government procurement.
Build Capability Before the Tender
The next area is capability readiness. Businesses should not only think about tendering when a bid becomes available. Instead, they should already have their methodology, business framework and approach prepared.
“You almost need to prepare it first and see: here I’m not ready to deal with this client, or here I’m not yet ready to start, or here I’m ready, but I’m missing this point,” she expands
A business also needs to understand what makes it different from other bidders. Why are you capable amongst all the other bidders?
With some tenders attracting hundreds of responses for a single service provider, having a clear methodology and demonstrating capability becomes important. AI can assist businesses with tender submissions, but it should not replace the business’s own knowledge and information.
Your AI assistant is not there to give you answers for your business. AI is to refine what you obviously provide to make it neat and simpler to read for the client.
Consider Risk Before You Win
Procurement readiness also involves understanding what could go wrong once a contract is secured. Each tender requires a business to consider the client’s potential risks and explain how those risks will be managed.
“This is our risk control. This is our risk methodology. What could go wrong in this project? This is how I’m going to mitigate it.”
Businesses need to consider issues such as working capital, staffing and key-person dependency. The objective is to build these considerations into the business before they become problems during delivery.
Pricing Beyond the Margin
Pricing was another important part of the discussion. Sebata described tender pricing as one of the difficult challenges when putting a response together and encouraged businesses to think about the total cost of ownership.
“The first thing that you must just have in your mind is total cost of ownership.”
This means looking beyond the supplier’s price and considering funding costs, invoice delays, invoice financing, warehousing, insurance, petrol, rent and other overheads. These costs can reduce the actual profit made from a contract if they are not considered upfront.
She also challenged the idea that there is a standard margin for government tenders.
“Somebody once talked about 30% when you’re doing government tenders, and that’s not the standard.”
Instead, pricing is circumstantial and depends on the service being provided and the effort required from the team at different stages of the project. Businesses should also clearly state their assumptions when submitting a tender.
“If we don’t indicate what the scope of your bid does not include, the client automatically thinks that everything else is sorted.”
Clearly defining what is included and excluded can help businesses avoid having to absorb unexpected costs.
Check Your Business Partners
The final point was the importance of due diligence on business partners. Sebata noted that there are projects that require black-owned and female-owned businesses with B-BBEE requirements, while larger companies are also looking to rotate their service providers.
However, businesses must also consider who they associate with. A partner can create an elevated risk during third-party assessments, potentially affecting the outcome of a bid.
For SMEs looking to enter procurement, the message from the 2026 SME Funding Summit was straightforward: readiness needs to come before the opportunity. Compliance, financial health, capability, risk management, pricing and due diligence all need to be considered before a business submits its bid.
